<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from _____________ to _____________
Commission file number 0-17001
Choices Entertainment Corporation
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
<TABLE>
<S> <C>
Delaware 52-1529536
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
509 Kinsale Road, Timonium, Maryland 21093
- ------------------------------------ ---------
(Address of Principal Executive Offices) (Zip code)
Issuer's Telephone Number, Including Area Code 410-643-2967
------------
</TABLE>
214 Queen Anne Club Drive, Stevensville, Maryland 21666
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since
last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes _ X___ No ____
State the number of shares outstanding of the issuer's Common Stock, as
of May 15, 1998: 22,004,395
Transitional Small Business Disclosure Format (check one):
Yes ____ No __X__
<PAGE> 2
Part I: FINANCIAL INFORMATION
Item 1. Financial Statements
CHOICES ENTERTAINMENT CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1998 December 31,1997
-------------- ----------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 27,326 $ 197,117
Accounts receivable 30,000 1,123
------------------ -----------------
Total current assets 57,326 198,240
Equipment, net 3,389 3,631
Other assets 125 125
------------------ ------------------
$ 60,840 $ 201,996
================== =================
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------------------
Current liabilities:
Accounts payable $ 9,722 $ 33,104
Accrued merger and acquisition expenses 353,799 353,799
Accrued professional fees 51,230 129,758
Accrued salaries 2,859
Other accrued expenses 5,000 5,419
------------------ -----------------
Total current liabilities 419,751 524,938
------------------ -----------------
Stockholders' deficit:
Preferred stock, par value $.01 per share:
Authorized 5,000 shares: 109 shares issued
and outstanding in 1998 and 1997
Common stock, par value $.01 per share:
Authorized 50,000,000 shares: issued and
outstanding 22,004,395 shares in 1998 and 1997 220,044 220,044
Additional paid-in-capital 21,236,035 21,236,035
Accumulated deficit (21,814,992) (21,779,022)
------------------ -----------------
Total stockholders' deficit (358,911) (322,941)
------------------ -----------------
$ 60,840 $ 201,996
================== =================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 3
CHOICES ENTERTAINMENT CORPORATION
STATEMENTS OF LOSS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
---------------
1998 1997
------------------------- -------------------------
<S> <C> <C>
Operating costs and expenses:
Selling and administrative expenses $ 36,178 $ 74,409
Professional and consulting expenses 30,661 57,992
Depreciation and amortization 81 7,457
------------------------- -------------------------
66,920 139,858
------------------------- -------------------------
Other expenses:
Gain on settlement of lawsuit 30,000
Interest income (expense), net 950 (17,061)
------------------------- -------------------------
30,950 (17,061)
------------------------- -------------------------
Loss from continuing operations (35,970) (156,919)
------------------------- -------------------------
Discontinued operations - Note 4
Loss from discontinued operations (11,308)
-------------------------
Net loss $ (35,970) $ (168,227)
========================= =========================
Net loss per share of common
stock - Note 2:
Basic loss per share:
Continuing operations $ -0- $ (0.01)
========================= =========================
Discontinued operations $ -0- $ (0.01)
========================= =========================
Diluted loss per share:
Continuing operations $ -0- $ (0.01)
========================= =========================
Discontinued operations $ -0- $ (0.01)
========================= =========================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 4
<TABLE>
<CAPTION>
CHOICES ENTERTAINMENT CORPORATION
STATEMENT OF STOCKHOLDERS' DEFICIT
For the Three Months Ended March 31, 1998
(Unaudited)
Preferred Stock Common Stock Additional
--------------- ------------ Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit Total
------------ ------ ------ ------ --------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 109 $1 22,004,395 $220,044 $21,236,035 $(21,779,022) $(322,941)
Net loss for the three months
ended March 31, 1998
(35,970) (35,970)
---------------------------------------------------------------------------------------------------
109 $1 22,004,395 $220,044 $21,236,035 $(21,814,922) $(358,911)
===================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
CHOICES ENTERTAINMENT CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (35,970) $ (168,227)
---------------------------- --------------------------
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Depreciation and amortization 81 248,579
Cost of rental films sold 86,027
Loss on disposal of rental films 45,644
Videocassette and inventory reserves 4,844
Change in assets and liabilities:
Increase in accounts receivable (28,877) (13,514)
Decrease in merchandise inventories 31,794
Decrease in prepaid expenses 32,643
Decrease in other assets 1,762
Increase (decrease) in accounts payable (23,381) 89,860
Decrease in accrued merger and acquisition
expenses (33,992)
Decrease in accrued professional fees (78,528) (24,201)
Decrease in deferred revenue (11,245)
Increase (decrease) in accrued salaries (2,859) 12,627
Decrease in other accrued expenses (420) (25,166)
---------------------------- --------------------------
Total adjustments (133,985) 462,259
---------------------------- --------------------------
Net cash provided by (used in) operating activities (169,955) 294,033
---------------------------- --------------------------
Cash flows from investing activities:
Purchase of equipment, net (5,997)
Proceeds from sale of fixed asset 164
Purchase of videocassette rental films (345,706)
---------------------------- --------------------------
Net cash provided by (used in) investing activities 164 (351,703)
---------------------------- --------------------------
Cash flows from financing activities:
Proceeds from notes payable 49,000
Repayment of notes payable (3,483)
--------------------------
Net cash used in financing activities 45,517
--------------------------
Net increase (decrease) in cash (169,791) (12,153)
Cash at beginning of period 197,117 66,739
---------------------------- --------------------------
Cash at end of period $ 27,326 $ 54,586
============================ ==========================
Supplementary disclosure of cash flow information:
Cash paid during the year for interest -0- $ 3,187
============================ ==========================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
CHOICES ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation And Significant Accounting Policies
The financial information included herein for the three- month period
ended March 31, 1998 and 1997 and as of March 31, 1998 are unaudited. In
addition, the financial information does not include all disclosures required
under generally accepted accounting principles because certain note information
has been omitted; however, such information reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of the results of
the interim periods and such adjustments are of a normal recurring nature. The
results of operations for the three-month period ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full year.
Reclassification of the 1997 financial statements has been made to
conform with the presentation of the 1998 financial statements.
Each share of Series C Preferred Stock is presently convertible into
40,000 shares of the Company's common stock.
Note 2 - Net Loss Per Common Share
Basic and diluted loss per share for the three-month periods ended
March 31, 1998 and March 31, 1997, was computed by dividing the net loss by the
weighted average number of common shares outstanding during the period. No
consideration was given to the conversion of preferred stock since the result of
that calculation would be anti-dilutive.
Three Months Ended
March 31,
---------
1998 1997
-------- --------
Number of shares used in calculation
Basic 22,004,000 22,004,000
Diluted 22,004,000 22,004,000
Note 3 - Liquidity
As previously reported, on June 16, 1997, the Company sold
substantially all of its assets and business (the "West Coast Transaction") to
West Coast Entertainment Corporation ("West Coast"). Notwithstanding the sale of
its operating business, the Company's consolidated financial statements included
herein have been presented on the basis that the Company is a going concern,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has incurred net losses in each
year of its existence, with the exception of the year ended December 31, 1997,
aggregating $21,814,992 from its inception through March 31, 1998, including a
net loss of $35,970 for the three-month period ended March 31, 1998. As of March
31, 1998, the Company had a net working capital deficiency of approximately
$362,000.
Under the terms of the West Coast Transaction, the purchase price of
$2,430,000 was paid to the Company in cash on June 16, 1997, less $243,000 that
was held by West Coast in escrow, pursuant to the terms of a escrow agreement
between the Company and West Coast, to satisfy certain indemnity obligations of
the Company, if any, to West Coast, and which was, subject to amounts withheld
pursuant to any claims made by West Coast, to be released to the Company over a
period of eighteen months. On December 22, 1997, the Company negotiated a
compromise and full release of the escrow upon the payment by West Coast to the
Company of $211,000 on that date. The release of the escrow did not affect in
any manner the Company's indemnity obligations to West Coast pursuant to the
terms of the asset purchase agreement between the Company and West Coast.
<PAGE> 7
CHOICES ENTERTAINMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Note 3 - Liquidity (Continued)
From the closing of the West Coast Transaction on June 16, 1997,to
the present, the Company has principally (i) satisfied and compromised various
claims and liabilities; (ii) defended and settled litigation, and paid
professional fees, including substantial fees associated with such litigation;
(iii) maintained administrative functions (at present the Company has no
employees) and (iv) attempted to identify and consider new business
opportunities.
To date, the Company has been unsuccessful in concluding any new
business opportunities or in securing needed capital, in part due to the
uncertainties and costs associated with continuing stockholder litigation in
California, which, as previously reported, was settled in the amount of $87,000,
excluding professional fees, on November 20, 1997. The Company's efforts have
also been hampered because of uncertainties associated with attempts, since
November 25, 1997, by certain stockholders to gain control of the Company. As a
consequence, the Company's financial condition has continued to deteriorate and
the Company presently has very limited cash remaining with which to seek or
conclude any new business opportunities. Moreover, certain liabilities remain
and certain claims against the Company exist which, if successfully asserted,
would result in there being no cash remaining. The existence of these claims and
liabilities have further hampered the Company in its efforts to conclude new
business opportunities or to secure needed capital. As of the date of this
report, the Company has approximately $12,000 in cash remaining. As a result,
the Company's viability is seriously in question.
These claims and liabilities include but are not limited to
professional fees billed in connection with the Company's discontinued
acquisition program in the amount of $353,799, which remain unpaid to a law firm
retained in that connection. Previously, in 1994, JD Store Equipment, Inc. ("JD
Store Equipment") agreed that, in the event the then contemplated merger between
JD Store Equipment and the Company (the "JD Merger") was not consummated, JD
Store Equipment would pay to the Company legal fees billed to the Company by the
above law firm. That law firm resigned as counsel to the Company shortly after
JD Store Equipment notified the Company that it was terminating the JD Merger in
September 1995. Subsequently, the Company made a demand for payment upon JD
Store Equipment for all fees and disbursements in the amount of $793,281 billed
to it by the law firm, of which $439,482 has to date been paid by the Company.
JD Store Equipment has responded with a suggestion of a counter claim in an
unspecified amount for losses allegedly incurred in connection with the
acquisition program. To avoid the uncertainties associated with litigation and
with collecting any judgment that may be obtained, the Company has attempted to
reach a settlement with JD Store Equipment and the law firm, pursuant to which
JD Store Equipment would pay unpaid fees to the law firm, the Company would
release JD Store Equipment from any obligation to pay the $793,281 of legal fees
billed to the Company and the Company would be released by JD Store Equipment
and the law firm. Although discussions have taken place regarding such a
settlement, there is no assurance that any settlement will be concluded.
Moreover, the law firm has notified the Company that it intends to file a
lawsuit against the Company in connection with its outstanding invoices.
These claims and liabilities also include a request for
indemnification by a former director, who is the President of JD Store
Equipment, for legal fees expenses incurred in the defense of the previously
concluded stockholder litigation in California, which are substantial and
material in amount. The Company has denied the former director's request as it
does not believe that it has any obligation for indemnification of such legal
fees and expenses. However, it is contemplated that any settlement reached with
JD Store Equipment, as described above, would include a release by the former
director of any indemnification claims that he may have against the Company.
There is no assurance, however, that any such settlement will be concluded or,
if concluded, as to what would be the terms of such a settlement.
The Company's 5% unsecured promissory notes (the "Notes"), in the
principal amount of $680,000, matured on September 11, 1997, leaving the holders
thereof with the sole remedy of converting such notes into shares of the
Company's Series C Preferred Stock (valued at $.25 per share of Common Stock).
The Holders of such Notes have, in accordance with the terms of the Notes,
converted such Notes into 68 shares of the Company's Series C Preferred Stock.
In addition, because of its severely distressed financial condition, the Company
elected to
<PAGE> 8
CHOICES ENTERTAINMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Note 3 - Liquidity (Continued)
issue 3.6833 shares of its Series C Preferred Stock to the holders of the Notes,
in payment of $36,833 of accrued interest due such noteholders in September,
1997, in accordance with the terms of such Notes.
In the event the Company is not successful in finding and concluding
new business opportunities or in securing needed capital in the very near term,
as to which no assurance can be given, the Company does not believe that there
will any amounts available for distribution to the Company's stockholders.
Note 4 - West Coast Transaction and Discontinued Operations
As previously reported, the Company consummated the previously
announced sale of substantially all of its assets to West Coast on June 16,
1997. Under the terms of the West Coast Transaction, the purchase price of
$2,430,000 was paid to the Company in cash on June 16, 1997, less $243,000 that
was held by West Coast in escrow, pursuant to the terms of a escrow agreement
between the Company and West Coast, to satisfy certain indemnity obligations of
the Company, if any, to West Coast, and which was, subject to amounts withheld
pursuant to any claims made by West Coast, to be released to the Company over a
period of eighteen months. On December 22, 1997, the Company negotiated a
compromise and full release of the escrow upon payment by West Coast to the
Company of $211,000 on that date. The release of the escrow did not affect in
any manner the Company's indemnity obligations to West Coast pursuant to the
terms of the asset purchase agreement between the Company and West Coast.
Revenues for the discontinued business for the three-month period
ended March 31, 1997, were $1,256,000.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's financial condition,
changes in financial condition, and results of operations. The discussion also
includes the Company's liquidity and capital resources at March 31, 1998 and
later dated information, where practicable.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
As previously reported, on June 16, 1997, the Company sold
substantially all of its assets and business (the "West Coast Transaction") to
West Coast Entertainment Corporation ("West Coast"). Notwithstanding the sale of
its operating business, the Company's consolidated financial statements included
herein have been presented on the basis that the Company is a going concern,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has incurred net losses in each
year of its existence, with the exception of the year ended December 31, 1997,
aggregating $21,814,992 from its inception through March 31, 1998, including a
net loss of $35,970 for the three-month period ended March 31, 1998. As of March
31, 1998, the Company had a net working capital deficiency of approximately
$362,000.
Under the terms of the West Coast Transaction, the purchase price of
$2,430,000 was paid to the Company in cash on June 16, 1997, less $243,000 that
was held by West Coast in escrow, pursuant to the terms of a escrow agreement
between the Company and West Coast, to satisfy certain indemnity obligations of
the Company, if any, to West Coast, and which was, subject to amounts withheld
pursuant to any claims made by West Coast, to be released to the Company over a
period of eighteen months. On December 22, 1997, the Company negotiated a
compromise and full release of the escrow upon the payment by West Coast to the
Company of $211,000 on that date. The release of the escrow did not affect in
any manner the Company's indemnity obligations to West Coast pursuant to the
terms of the asset purchase agreement between the Company and West Coast.
From the closing of the West Coast Transaction on June 16, 1997,to
the present, the Company has principally (i) satisfied and compromised various
claims and liabilities; (ii) defended and settled litigation, and paid
professional fees, including substantial fees associated with such litigation;
(iii) maintained administrative functions (at present the Company has no
employees) and (iv) attempted to identify and consider new business
opportunities.
To date, the Company has been unsuccessful in concluding any new
business opportunities or in securing needed capital, in part due to the
uncertainties and costs associated with continuing stockholder litigation in
California, which, as previously reported, was settled in the amount of $87,000,
excluding professional fees, on November 20, 1997. The Company's efforts have
also been hampered because of uncertainties associated with attempts, since
November 25, 1997, by certain stockholders to gain control of the Company. As a
consequence, the Company's financial condition has continued to deteriorate and
the Company presently has very limited cash remaining with which to seek or
conclude any new business opportunities. Moreover, certain liabilities remain
and certain claims against the Company exist which, if successfully asserted,
would result in there being no cash remaining. The existence of these claims and
liabilities have further hampered the Company in its efforts to conclude new
business opportunities or to secure needed capital. As of the date of this
report, the Company has approximately $12,000 in cash remaining. As a result,
the Company's viability is seriously in question.
These claims and liabilities include but are not limited to
professional fees billed in connection with the Company's discontinued
acquisition program in the amount of $353,799, which remain unpaid to a law firm
retained in that connection. Previously, in 1994, JD Store Equipment, Inc. ("JD
Store Equipment") agreed that, in the event the then contemplated merger between
JD Store Equipment and the Company (the "JD Merger") was not consummated, JD
Store Equipment would pay to the Company legal fees billed to the Company by the
above law firm. That law firm resigned as counsel to the Company shortly after
JD Store Equipment notified the Company that it was terminating the JD Merger in
September 1995. Subsequently, the Company made a demand for payment upon JD
Store Equipment for all fees and disbursements in the amount of $793,281 billed
to it by the law firm, of which $439,482 has to date been paid by the Company.
JD Store Equipment has responded with a suggestion of a counter claim in an
unspecified amount for losses allegedly incurred in connection with the
acquisition program. To avoid the uncertainties associated with litigation and
with collecting any judgment that
<PAGE> 10
may be obtained, the Company has attempted to reach a settlement with JD
Store Equipment and the law firm, pursuant to which JD Store Equipment would
pay unpaid fees to the law firm, the Company would release JD Store Equipment
from any obligation to pay the $793,281 of legal fees billed to the Company and
the Company would be released by JD Store Equipment and the law firm. Although
discussions have taken place regarding such a settlement, there is no assurance
that any settlement will be concluded. Moreover, the law firm has notified the
Company that it intends to file a lawsuit against the Company in connection
with its outstanding invoices.
These claims and liabilities also include a request for
indemnification by a former director, who is the President of JD Store
Equipment, for legal fees expenses incurred in the defense of the previously
concluded stockholder litigation in California, which are substantial and
material in amount. The Company has denied the former director's request as it
does not believe that it has any obligation for indemnification of such legal
fees and expenses. However, it is contemplated that any settlement reached with
JD Store Equipment, as described above, would include a release by the former
director of any indemnification claims that he may have against the Company.
There is no assurance, however, that any such settlement will be concluded or,
if concluded, as to what would be the terms of such a settlement.
The Company's 5% unsecured promissory notes (the "Notes"), in the
principal amount of $680,000, matured on September 11, 1997, leaving the holders
thereof with the sole remedy of converting such notes into shares of the
Company's Series C Preferred Stock (valued at $.25 per share of Common Stock).
The Holders of such Notes have, in accordance with the terms of the Notes,
converted such Notes into 68 shares of the Company's Series C Preferred Stock.
In addition, because of its severely distressed financial condition, the Company
elected to issue 3.6833 shares of its Series C Preferred Stock to the holders of
the Notes, in payment of $36,833 of accrued interest due such noteholders in
September, 1997, in accordance with the terms of such Notes.
The Company's viability for the foreseeable future is and will
continue to be dependent upon its ability to successfully conclude existing
litigation, to find other business opportunities and to secure needed capital.
No assurance can be given that the Company will be successful in that regard. In
the event the Company is not successful, it is unlikely that there would be any
amounts available for distribution to the Company's stockholders.
This Quarterly Report on Form 10-QSB contains forward looking
information with respect to, among other things, plans, future events or future
performance of the Company, the occurrence of which involve certain risks and
uncertainties that could cause actual results or future events to differ
materially from those expressed in any forward looking statements. These risks
and uncertainties include, but are not limited to, the risks and uncertainties
associated with adverse litigation, the ability to identify and conclude
alternative business opportunities, and those risks and uncertainties detailed
in the Company's filings with the Securities and Exchange Commission. Where any
forward looking statement includes a statement of the assumptions or bases
believed to be reasonable and are made in good faith, assumed facts or bases
almost always vary from actual results, and the differences between assumed
facts or bases and actual results can be material, depending upon the
circumstances. Where, in any forward looking statement, the Company expresses an
expectation or belief as to plans or future results or events, such expectation
or belief is expressed in good faith and believed to have a reasonable basis,
but there can be no assurance that the statement of expectation or belief will
result or be achieved or accomplished. The words "believe", "expect" and
"anticipate" and similar expressions identify forward looking statements.
CAPITAL EXPENDITURES
. The Company had no capital expenditures during the three-month
period ended March 31, 1998 and does not anticipate any capital expenditures for
the remainder of the current year.
MATERIAL CHANGES IN FINANCIAL CONDITION
Assets:
Total assets decreased by approximately $141,000 between December 31,
1997 and March 31, 1998, primarily as the result of both the decrease in cash
used to pay certain obligations and liabilities of the Company, and to the
increase in accounts receivable resulting from the favorable settlement of a
previously reported lawsuit.
<PAGE> 11
Liabilities:
Total liabilities decreased by approximately $105,000 between
December 31, 1997 and March 31, 1998, primarily due to the payment of a portion
of the Company's liabilities from a portion of the remaining proceeds received
from the West Coast Transaction.
Stockholders' Deficit:
Between December 31, 1997 and March 31, 1998, the increase in
stockholders' deficit was due to the net loss of approximately $36,000 for the
three-month period ended March 31, 1998.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Continuing Operations:
Losses from continuing operations were approximately $36,000 and
$157,000 during the three-month periods ended March 31, 1998 and 1997,
respectively. The decrease of approximately $121,000 during the three- month
period ended March 31, 1998, was primarily related to decreased selling and
administrative and professional fee expenses .
Discontinued Operations:
The loss from discontinued operations was approximately $11,000
during the three-month period ended March 31, 1997.
Net Loss:
As a result of the foregoing, the Company incurred a net loss of
approximately $36,000 during the three-month ended March 31, 1998.
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the Index to Exhibits appearing on Page E-1
are included as part of this report.
(b) Reports on Form 8-K
None.
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CHOICES ENTERTAINMENT CORPORATION
Date: May 22 , 1998 By: /s/ John Boylan
-----------------
Chairman of the Board of Directors
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
- -------- --------------------------
<S> <C>
3(a) Certificate of Incorporation, as amended (1)
(b) Certificate of Designations of Series C Preferred Stock, as amended (2)
(c) By-Laws, as amended (3)
4(a) Form of Certificate Evidencing Shares of Common Stock (4)
(b) Form of 5% Promissory Note (5)
10(a) Consulting Agreement between Registrant and Ronald W. Martignoni (6)
27(a) Financial Data Schedule (7)
</TABLE>
- -----------------------------------------------------------------------------
(1) Filed as an Exhibit to Registrant's Registration Statement on Form S-8
(File No. 33-87016) and incorporated herein by reference.
(2) Filed as an Exhibit to Registrant's Annual Report on Form 10-KSB, for
the year ended December 31,1996 and incorporated herein by reference.
(3) Filed as an Exhibit to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992 and incorporated herein by reference.
(4) Filed as an Exhibit to Registrant's Registration Statement on Form S-1,
inclusive of Post-Effective Amendment No.1 thereto (File No.:
33-198983) and incorporated herein by reference.
(5) Filed as an Exhibit to Registrant's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1995 and incorporated herein by
reference.
(6) Filed as an Exhibit to Registrant's Annual Report on Form 10-KSB for
the year ended December 31, 1997
(7) Filed herewith.
E-1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Choices Entertainment Corporation and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 27,326
<SECURITIES> 0
<RECEIVABLES> 30,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 57,326
<PP&E> 4,034
<DEPRECIATION> 645
<TOTAL-ASSETS> 60,840
<CURRENT-LIABILITIES> 419,751
<BONDS> 0
220,044
0
<COMMON> 1
<OTHER-SE> (578,955)
<TOTAL-LIABILITY-AND-EQUITY> 60,840
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 66,920
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (950)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,970)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 443,418
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
